Friday 29th November 2019
On 29 October 2019, the Solicitors Regulation Authority (SRA) announced that it will be writing to all 7,000 firms falling under the scope of the Money Laundering Regulations 2017 to investigate whether they have a firm risk assessment in place, and supplementing this information request with an extensive programme of targeted, in-depth visits to firms on this list.
This announcement arises against the backdrop of its more pro-active investigative approach. In March, the SRA wrote to 400 law firms asking them to demonstrate compliance with the 2017 regulations. While they received 400 responses, 21% of them failed to provide a compliant firm risk assessment. Further, the SRA has opened over 172 anti-money laundering (AML) compliance investigations in this year alone, leading to cases before the Solicitors Disciplinary Tribunal and solicitors being struck-off or suspended.
Why this crackdown?
According to the National Crime Agency, hundreds of billions of pounds are laundered through the UK every year and used to fund further crimes, political corruption and even terrorism.
Due to their access to financial markets and ability to legitimise transactions, solicitors and firms are attractive targets for those seeking to launder proceeds of crime. If solicitors become involved, even unknowingly, they will be considered to support this crime, the consequences of which could include disciplinary and potential criminal proceedings.
How can firms protect themselves?
Law firms are ideally placed to detect money laundering, but only if they have adequate client due diligence processes and risk assessments in place to do so. Money Laundering Reporting and Compliance Officers and those who regularly supervise financial transactions in their organisation must therefore ensure that they keep abreast of AML developments and update their internal policies accordingly.
For an in-depth analysis of the current AML legislation, practical case studies and guidance on how to mitigate risk, don’t miss our new AML online courses: AML Update – For Compliance Officers and Senior Managers and AML Update – For Legal Professionals and Support Staff.
Want to get up to 50% off training?
Become a member and get access
to the latest industry updates.